Insurance Scammers Finally Go on Trial in Southern California

As San Francisco and Oakland insurance attorneys we pay attention to all insurance-related headlines. For example, almost decade ago there was a big news story about a massive, and twisted, insurance fraud scheme that crossed state borders. Four key players in that horrendous scheme are finally going to trial this week in a southern California courtroom to be held accountable for their crimes, which border on gruesome.

The New Times in Phoenix broke the story, and has continued to report on it. The story starts with fake totally healthy “patients” being recruited in Phoenix. They were hired for $800 to travel to Los Angeles and undergo completely unnecessary, and potentially dangerous, medical procedures. Many were not told about the side effects of these procedures, including one man who was struggling with the loss of strength in his hands, making it difficult for him to work. These included sweat-gland and sinus surgeries, colonoscopies, endoscopies, and gynecological and testicular procedures. The clinics that performed these operations would then bill the insurance companies at extremely high rates, and in this case the insurance companies asked few questions of the submitting doctors and organizations and paying out tens of millions of dollars in this massive fraud scheme. California officials estimate that 2,481 healthy “patients” went to California to undergo treatment from just one of the fake groups, Unity Outpatient, that was recruiting them.

The plan was that the patients would receive these huge reimbursement checks from the insurance companies and would turn them over, as they had already been paid their $800 fee. But some greedy “patients” saw the checks and cashed them instead of handing them over. One of Unity’s lawyers, himself deeply wrapped up in this scheme, actually sued the employees to get the fraudulently collected checks back! The whole mess unraveled from there. Roy Dickerson, that attorney, even claimed that they were being defamed at one point. Mr. Dickerson is no longer allowed to practice law and is one of the four main players about to go on trial in California.

The charges in this case of renting patients and harmful unnecessary surgeries include grand theft, conspiracy, insurance fraud (https://www.brodfirm.com/), filing false claims, and aggravated white-collar crime. Mr. Dickerson is additionally charged with money laundering, perjury, filing false tax returns, and failure to file tax returns. He also allegedly tried to transfer money around in a bid to hide their ill-gotten gains from federal investigators and prevent the victims from getting access to deserved restitution.

Some players have already been tried and convicted. Dr. William Hampton was sentenced to ten years in federal prison in 2008 and ordered to pay almost $2.5 million in restitution to patients on whom he performed unnecessary medical procedures. One of the original masterminds, Tam Vu Pham, is serving a 12 year sentence at the moment.

This kind of scheme is tragic and gruesome. However, it is a reminder that insurance fraud of various kinds happens all the time to many honest people. When it is one person against a huge company, the company often holds all the cards and tries to get away with wrongfully denying claims. If this has happened to you in our area, contact our Oakland or San Francisco insurance attorney to learn about your options.